Mayor Jean Stothert told the Omaha City Council on Tuesday that her $793 million budget proposal for 2014 is a first step in an ongoing effort to push the city to “streamline, consolidate and become more efficient.”
The plan doesn't yet accomplish Stothert's campaign goals of cutting property taxes and repealing the city's restaurant tax. But faced with the challenges of surging health care and wage expenses and stagnant property and sales tax revenue, the mayor said she's confident that her budget will keep the city on track.
Stothert's general fund budget for basic city operations comes in at $340.5 million, about $19 million more than last year's budget. It provides additional resources for several departments, including police, fire, planning and libraries, while giving cuts to the Mayor's Office and the Law, Human Resources and Parks Departments, among others.
The proposed budget calls for:
» Money for a police recruit class and new cruisers. Stothert would also finance the $3.6 million purchase of 755 new portable police radios with lease-purchase bonds.
» An additional $8.2 million for the Fire Department, which would still face cuts ranging from firefighter layoffs and demotions to idled rigs.
» Additional funding for demolition of dilapidated houses. The Mayor's Office said the city will be able to remove an additional 30 properties from a 650-property waiting list.
» More money for street resurfacing projects.
» Funding that will allow all libraries to remain open without changes to service hours.
» About $150 million in bonds to be issued to help fund the city's $2 billion sewer project.
Stothert said the proposed general fund increase is smaller than it appears on paper. Discounting $4.3 million in funding related to the Elkhorn Fire District and $3.7 million from a new tobacco tax used to fund a cancer research center — money that comes in and goes out without opportunity for spending — the increase is 3.3 percent.
At the same time, property tax revenue is expected to fall slightly because of decreases in property valuations, and more sales tax revenue will be turned over to the state for business incentives. To tackle rising costs and limited revenue, the mayor had to rely on the restaurant tax she campaigned against.
In 2014, the city expects that the tax will bring in about $27.7 million, up from $25.6 million this year. A surplus from 2012 also helped shore up an estimated $20 million gap between projected revenues and department budget requests.
Stothert said she didn't have enough time to figure out how to fill budget gaps without that restaurant tax revenue, though she wants to get rid of it in the future.
“In a five-week period, I think that's quite a bit to tackle, to come out with a no-tax-increase budget,” she told The World-Herald. “My goal in the next three years with other budgets will be to try to achieve what I had promised, and that is a tax reduction.”
The mayor told the council that she'll continue to ask departments to look for ways to save money.
Stothert also plans to ask members of the police and fire unions to adopt a single health care plan that would be shared by all city employees. She said that will be a top priority when the city reopens labor contract negotiations with the unions.
“That has to be done with negotiations,” she said. “But I think the unions need to realize, when they look at these rising health care costs, that they're going to have to give.”
“That's a big way to reduce spending, and we must do it.”